What's been going on in the past months?
The trial against FTX, formerly the second largest crypto exchange in the world, began in New York on March 3. October 2023 years. The founder and former DIRECTOR of FTX, Sam Bankman-Fried, has been charged with multiple felonies, including fraud, money laundering, conspiracy and violations of political finance laws. Prosecutors allege Bankman-Fried stole billions of dollars from his clients, investors and creditors, and used some of that money to bribe and donate to politicians. Bankman-Fried was arrested in the Bahamas in December 2022. Ftx went bankrupt and left a debt of about eight billion dollars. In the past three months, the court has issued several decisions that have influenced the course of the trial. In late July, prosecutors dropped charges of violating election funding rules, after the Bahamas confirmed they would not extradite him to the U.S. over that charge. In doing so, the trial lost one political dimension, but also facilitated the extradition of the SBF. In late August, the court granted a request by Terraform Labs, one of ftx’s lenders, to issue subpoenas to FTX and FTX. U.S., two affiliated companies, to gather evidence for his defense. Terraform Labs is one of the sides launched by the SEC against ftx for allegedinvestor fraud. In early September, the court rejected a request by Bankman-Fried’s legal team to postpone the trial due to the coronavirus pandemic, and confirmed the trial start date for March 3rd. October. Given the gravity of the allegations and the magnitude of the fraud, the trial against FTX is expected to take several months, if not years. The SBF has pleaded not guilty to all charges, and will fight for his innocence. He also faces a second indictment, which will begin next year, relating to bribery, conspiracy and bank fraud of international proportions. The fate of the SBF, as well as its former clients, that is, investors, will depend on the outcome of this court process, which is already known as one of the largest cases of financial fraud in American history.
Source: cointelegraph
Sam Bankman Fried in prison
After being found guilty of all counts, Sam Bankman Fried ended up in jail, where he is awaiting sentencing. The former FTX CEO has been charged with 11 felonies, each carrying a maximum sentence of 20 years in prison, except for one that carries 5 years. That means Bankman Fried could get up to 115 years in prison, though a judge is unlikely to impose such a sentence. However, the SBF is expected to receive a sentence that will last for decades, given the gravity and extent of its scams. His trial lasted a month and the jury reached a verdict after less than five hours of deliberation. Sam Bankman Fried has been in jail since December 2022. He was arrested in the Bahamas, where he tried to flee from U.S. authorities.
Source: cointelegraph
What will happen to the user's funds?
Ftx beneficiaries’ funds are largely compromised due to a scam committed by Sam Bankman-Fried. According to a Reuters report, after the collapse of FTX, allegedly ten billion dollars worth of user funds were secretly transferred to Alameda Research, a trading company co-founded by Bankman-Fried. This means that FTX has a shortage of user funds and cannot pay out all of its users, of which there were more than a million. The plan to return funds to FTX users is not yet clear, as FTX has filed for bankruptcy protection in the U.S. This means that FTX will try to restructure its debts and continue operations, rather than liquidating and selling off its assets. However, it also means that the reimbursement process will be complex and time-consuming, as it will involve courts, bankruptcy trustees, regulatory agencies and various other complications. Bankruptcy lawyers warn that extracting funds from ftx could take years or even decades. The likelihood that FTX users will get their funds back depends on a number of factors, such as the outcome of the trial against Bankman-Fried, the condition and location of ftx’s assets, the priority and claims of various creditors, bankruptcy costs and legal disputes. Some FTX users have already filed lawsuits against FTX and Bankman-Fried, seeking damages and refunds. However, there is no guarantee that these lawsuits will succeed or that there will be sufficient funds to pay all beneficiaries. FTX users who have traded crypto for crypto may not see the distribution for years, while those who have bought crypto with cash have a slightly higher chance of refunding.
Source: cointelegraph
The importance of keeping cryptocurrencies on your own wallet
One of the most important lessons we can learn from the FTX case is the importance of keeping cryptocurrencies on our own wallet. When you use a crypto exchange, you don’t actually own your cryptocurrencies, but entrust them to a third party, which can be unreliable, insecure, or even fraudulent. This means that you are at risk of losing your money if the exchange crashes, is hacked, robbed or regulated. This happened to many FTX users, who ran out of their funds after FTX went bankrupt and charged with fraud. Therefore, we always recommend that you keep your money on your own wallet, so that no one but you has access to the funds. Your own wallet is an app or device that allows you to send, receive and store cryptocurrencies in a secure and decentralized way. There are different types of wallets, such as software, hardware, paper or mobile wallets, but they all have one thing in common: words for recovery. Words for recovery are a series of 12 or 24 words that serve as a key to your wallet. If you lose or damage your wallet, you can recover it using those words. However, if you lose or forget those words, you won’t be able to access your money. That is why it is very important that wallet recovery words are always physically written down by users on a piece of paper and kept in a safe place. You should not keep these words on your computer, mobile phone or e-mail, as this increases the risk of hacking, theft or loss. Also, you should never share those words with anyone, because it means giving control of your money to another person. If someone is looking for your words to recover, it’s probably a scam. Keeping cryptocurrencies on your own wallet gives you full responsibility, but also full freedom over your money. You don’t have to rely on exchange offices, which can be unsafe, expensive, slow, or unavailable. You can manage your transactions, security and privacy yourself. This is in line with the idea of cryptocurrencies, which are designed to be decentralized, transparent and resistant to censorship. That is why you should not keep money on exchange offices, just because of cases such as FTX.
Source: cointelegraph
Conclusion
We hope you have learned something new about recent developments related to the demise of the crypto exchange FTX. We all hope that the funds will be returned to users, but what we have definitely learned is that cryptocurrencies should be kept on their own wallet, where only you have access to the funds, and not entrusted to third parties such as crypto exchanges. If you have any questions feel free to ask them on our social networks (Twitter, Instagram).
